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Goldman Sachs (NYSE:GS), one of the most influential banks in commodity markets, poured cold water on the growing belief that metals and oil prices have "bottomed out," and warned the current rally is "not sustainable."

In a series of reports published Tuesday, the bank said the 20-month commodity rout had further to run and prices needed to remain lower for longer to rebalance markets that are still groaning under the weight of plentiful supplies.

“Demand hasn’t really changed, [so] it takes lower prices to push and keep supply below demand to create a deficit,” said Jeffrey Currie, Goldman’s head of commodities research.He added that any increase in raw material prices would prompt more supplies to enter the market, making it difficult for any advance to be sustained.

On Monday, iron ore prices surged nearly 20%, its biggest one-day gain on record. The steelmaking raw material was trading at $62.60 per dry metric tonne CFR Tianjin port on Monday, up $10.20 compared to Friday according to data supplied by The Steel Index.Oil also climbed, hitting a three-month high with benchmark Brent crude breaking through the $40 mark, as improving sentiment in financial markets helped support prices and data revealed investors have dramatically upped their bets on the price of oil rising.

Any increase in raw material prices will prompt more supplies to enter the market, making it difficult for any price rally to be sustained.

But the bank is saying no one should get too excited about this long-awaited oil price rally. According to Goldman, prices need to stay lower for some time yet to allow a rebalancing in supply and demand in oil production.

"Energy needs lower prices to maintain financial stress to finish the rebalancing process; otherwise, an oil price rally will prove self-defeating as it did last spring," Goldman noted.Goldman, which has consistently maintained a negative view on the current and medium-term state of commodities, is also warning against betting on a recovery of metals prices, being particularly bearish on copper and aluminum.

The bank maintained its bearish outlook for gold, said iron ore’s surge would prove temporary, and forecast copper prices dropping 18% to 20% during 2017.

“Overall we find that the likelihood of a sustained improvement in Chinese demand during 2016-17 is low, and we remain strongly of the view that the structural bear market drives that have contributed to metals declining 20 per cent over the past year and 50 per cent over the past five years remain intact,” they conclude.